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Ontario Teachers Strengthens Climate Oversight

Canada’s Ontario Teachers’ Pension Plan Board has published its 2024 proxy voting guidelines, setting heightened expectations for audit committees. New requirements include climate literacy being a core competency for members, and climate-related impacts being systematically evaluated when reviewing budgets, performance and M&A activity. Audit committees should also understand environmental and reporting-related requirements for companies. In addition, the updated guidelines contain measures for long-term value creation and effective corporate governance. They mention that clarity should be provided on director accountability when elections are staggered and/or shareholder rights weakened, and that issuers should include shareholder proposals in their disclosures “where and when possible”. “This year, we are emphasising the role of the audit committee in managing climate change risks,” said Anna Murray, Senior Managing Director and Global Head of Sustainable Investing at Ontario Teachers. “We believe their oversight will play an increasingly crucial role in helping companies navigate the challenges presented by climate change.”

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